If your house burned down tomorrow and your entire collection of insulators was lost, would you be able to recover their value from your insurance company? The answer is a definite maybe. It seems like a simple question, but the answer unfortunately opens a Pandora's box of insurance policy language, exclusions, and statutory and common law concepts. This article is intended to share with you some basic principles of insurance as it relates to this hobby. It is by no means a treatise on the subject and in all cases a careful review of your policy is required.

Typical homeowner's policies protect the insured against risks primarily arising out of activities at or around the Homestead or Residence Property. The homestead property is typically defined as the place where the insured resides or the part of other premises, structures or grounds used by the insured as a residence. Coverage does not, however, stop here. Generally, your property that is normally kept in your home that is away from the premises at the time of loss is covered.

First, let's look at the situation, or disaster, identified above. There are many ways that you could lose your insulator collection, or part of it. It could be lost as a result of fire, theft, vandalism and so on. Generally, if your collection is lost in any of these ways it is covered. Covered, however can also mean several things. The treatment of personal property under insurance policies can generally be treated two ways. First, the policy could provide for replacement of the item by payment of the fair market value at the time the item was purchased less depreciation if any. Modem policies, however, provide for true replacement cost. 

Replacement cost policies are by far preferable for just about every homeowner or renter. The extra cost for replacement cost coverage is very small in comparison to the benefit gained. In theory an insurance company would be obligated to pay whatever it takes to replace the lost items with comparable merchandise. This usually means a new piece as close as possible to the original. If you lost a Sunbeam toaster model 101, for example, the insurance company would compensate you the amount to purchase the same toaster in today 's market, regardless of price increase.

What about insulators?

The problem with insulators is two-fold. First, literally all policies have exclusions for "antiques or similar articles of rarity or antiquity which cannot be replaced; or collectors items whose age or history contribute to their value." Second, the replacement cost in the event of a one of a kind CD may be moot as there would be no replacement. Upon making a claim, an insurance company would clearly try to fit your insulator collection into one of the above two categories and deny coverage. 

The only "sure-fire" protection against the loss of your collection would be a separate rider to your policy. The trouble with these is their cost. As with all insurance questions, it is up to the insured to weigh the risk against the cost of the policy. If the insured elects to not purchase a separate rider due to its cost here are some tips for attempting a claim under a conventional policy.

First, examine your policy's exclusions. An insurance adjuster is not going to have a working knowledge of insulators, so it will be up to you to educate him or her. Try to fit your insulators under something other than antiques. "Antiques" is not a term you will find in your policy's definitions. The company will, therefore, use a commonly accepted, or in some cases a court defined definition of the term. Many insulators could be classified as not antiquities due to their age. Second, always keep a complete list of your insulators together with a photograph of the collection at a location physically separate from the insulators themselves. This is absolutely essential to any insurance claim. Insulators are not something that you would typically have receipts for, so proof of ownership is going to have to come from something else. 

Second, provide the company with a detailed list of the items lost and the cost of replacement. A book such as McDougald's price guide would be of use here. The easier you make it for the insurance company, the greater the chances of recovery. For this reason try to track down where replacements are available. Remember the exclusion about difficult to replace items. If an item is not readily replaceable you can take one of two positions. You could request a suitable substitution, an insulator of similar value, or you could request a cash settlement. In the case of a cash settlement for an item not replaceable, however, most policies provide for depreciation of the item. For this reason I recommend the former.

The business-pursuits exclusion

In addition to the exclusions mentioned above, one more merits discussion here. Practically all homeowners or renter's policies provide that if the items lost are part of a business pursuit they are not covered. This prevents the insured from getting business coverage under her homeowner's policy. Dealers beware! If an insurance company can classify your items as business related they will not be covered. In attempting to determine whether an item is business related an insurance company will look to several factors:

The insurance company may take your sworn statement under oath to determine these items. An insurance company must have a reasonable basis for denying a claim in order to avoid a claim for bad faith. Reasonable basis is a term of art which is defined by state law and will differ from state to state, but generally means that they have some concrete basis.

In applying the business-pursuits or other excluding language of a policy an insurance company is sure to take the broadest definition possible in order to deny the claim, so beware. This article is only meant to expose you to some of these insurance concepts. It is essential to think about these items now rather than after the unexpected happens.